Manassas Pulls Plug on "Broadband Over Powerline" Service

The Manassas City Council unanimously voted to discontinue offering its municipal broadband over Powerline access service. The Manassas service had been touted in the past as an example of how municipally-provided broadband service could succeed, as well as a proof of concept of the idea of using power lines as the access mechanism.

The shutfown affects about 520 residents and businesses who currently subscribe to the service, which will end in three months.

The council cited three reasons for the decision. First, customer penetration had been declining. Also, the service was costing more than it took in as revenue, and a determination that meter reading services do not require broadband access.

Observers note that the business case never proved as robust as expected. "It's costing a little more to maintain the system than we projected in the budget," Manassas Director of Utilities Michael Moon said. "The original projections were that the customer base would be double this."

The city has been running the service since the private operator, COMtek, found it also could not make a profit on the system.

In January 2009, there were 637 residential and 51 commercial BPL subscribers in Manassas. In February 2010, those numbers had shrunk to 457 residential and 50 commercial subscribers.

 The Utilities Commission said that the total revenue brought in by BPL for fiscal year 2010 was almost $186,000, but the expense of keeping up the City-owned system was costing the ratepayers a little more than $351,000, resulting in a net loss of almost $166,000.

"In October 2003, the Manassas City Council was told that it could expect as much as $4.5 million in revenue from awarding a 10-year BPL franchise," said American Radio Relay League CEO David Sumner. "Instead, six months later, BPL had turned into a money pit for the City of Manassas. Anyone thinking of investing in BPL would do well to learn from the Manassas experience."

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